Form 700s

Conflict of interest forms allow local officials to report few details about economic interests

If you're curious about the economic interests of your city leaders, the state's mandated disclosure forms won't tell you much.

Top officials and elected representatives from Lodi and Galt filed their Form 700s, or conflict of interest forms, this spring.

Of the many filings, however, only a small fraction detail anything about the leaders' investments, real estate holdings or gifts they've received.

Without any financial kingpins in Lodi or Galt government, it makes sense that there's not much listed, said several political observers.

Yet with the form's many disclosure exceptions, its vague requirements and the fact that they're not all audited, at least one government watcher says the 700s give a "murky" look at politician's holdings.

"It's not so much that people don't tell the truth on the forms," said Bob Benedetti, a longtime political science professor at the University of the Pacific in Stockton. "(But) it's hard to tell what it means."

In Galt, four of five city council members checked the box "no reportable interests on any schedule," signaling they don't own any stocks, conduct any private sector business in Galt or own any real estate aside from their home in the city.

Lodi city leaders were only a bit more specific.

And that's likely because they didn't have to be.

Politicians don't have to list any information about their private sector job if their employer doesn't do business in the city they represent.

If a council member has a day job with the state or a separate local government, they're not required to list that job or income either. Also, there's no requirement for officials or elected leaders to disclose anything about their savings, money market or retirement accounts or vacation property — unless they use it as a business deduction.

Even when officials do list the investments, property or businesses they own, they're only asked to give general descriptions of them and their value.

"The form is not designed to tell you how much they're worth, just if they have any conflict of interest," said Bob Stern, who helped draft the Political Reform Act of 1974, making the disclosure forms law.

'We're just basic, average people'

Several local leaders defended their filings, noting they've disclosed everything the state requires.

Lodi City Councilman Bob Johnson said his forms are a bit boring because he's "a plain vanilla guy."

"I'm not a wealthy individual," said Johnson, who works part-time as a real estate appraiser in Lodi. "I think I filled the forms out adequately and accurately. Just because I don't fill out 21 pages, that doesn't mean it's remiss."

There's nothing too spicy on the Galt forms either, as it should be, Galt City Councilman Tim Raboy said.

"We're just basic, average people," Raboy said of his fellow Galt council members, noting cities should be represented by folks with rather plain economic interests.

Raboy, along with Galt Councilman Don Haines, works in Sacramento as an investigator for the state's Board of Equalization.

Back in Lodi, Johnson and Councilman Phil Katzakian listed their businesses in town as required.

And Councilwoman Susan Hitchcock disclosed her and her husband's rental properties in the city.

Notably, only one of the 10 council members between the two cities — Galt City Councilman Darryl Clare — listed any gifts he had received in the past year above $50, as the forms mandate.

Lodi's city manager, attorney and clerk also marked "no reportable interests," along with Galt's city manager, treasurer and clerk. Galt's attorney, who is contracted through a private firm, listed the name of his company and reported that he earns "over $100,000."

The lack of detailed responses surprised Stern, who served as general counsel for the FPPC for nine years and now heads the Center for Government Studies, a Los Angeles-based think tank.

"If they're all retired, I'd understand," he said. "It is surprising that (almost) no gifts are listed at all. Most city council members do receive gifts."

Clare, the lone councilman to report a gift, said he has no reason to hide the two dinners he accepted last year on a Washington D.C. lobbying trip.

One was sponsored by Sutter Health. If Clare had hypothetically met the head of the hospital giant and convinced them to build in Galt, "Well, then that might be the best dinner I ever attended," the councilman said.

Several leaders in Lodi and Galt said they make it a personal rule not to accept freebies.

Raboy said he feels no politicians should be allowed to accept gifts. He doesn't even take campaign contributions, he noted.

Some will expense event tickets to the city, noted Hitchcock, the Lodi councilwoman.

"No one ever gives me any gifts," she noted, then added she may have taken some hand cream from a delegation from Lodi's sister city in Lodi, Italy some time back.

A track record

While the Form 700s aren't investigated too often, there's always the chance they will be.

That prospect, plus the $5,000 penalty per violation attached to the forms, keeps most politicians in check, several government watchers noted.

More than 100,000 government workers fill out Form 700s each year, noted Roman Porter, the commission's spokesman. He said he could not characterize how detailed most forms are, noting the commission's policy precludes him from doing so.

About 20,000 forms are sent from local juridictions to the FPPC's Sacramento offices, including forms for all elected officials, city managers, city treasurers and city planning commissioners.

Of those, about 90 percent get a full review, Porter said.

Matt Wetstein, a former political science professor at Delta College, said Stockton City Councilman Dan Chapman provides a stark example of why disclosing economic interests is important.

Chapman is the president of the Stockton Thunder, a minor league hockey team that plays at the city-subsidized Stockton Arena.

Chapman has consistently recused himself from votes on matters that affect the team and arena.

Of course, being in business isn't necessarily a bad thing for city leaders, noted Benedetti, the Pacific professor.

"I would want them to have serious managerial abilities — they've got to get it somewhere," he noted, adding that business owners in government can and do separate themselves from their own interests.

Kimberly Nalder, an assistant professor of government at California State University, Sacramento, likened the Form 700s to one of the many "institutional mechanisms" present in government.

She said they're used not so much to check up on politicians but to present the possibility that they will be.

"It's worth having them go through the process because it probably leads to more honest behavior than if we didn't," Nalder said.

The forms will follow the leaders throughout their careers, she noted.

Contact reporter Chris Nichols at chrisn@lodinews.com.